FIX exchange rate

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The FIX exchange rate is used as a reference between the Mexican peso and the US dollar, which is determined by Banco de México. The name of FIX comes from English (Fixed Exchange Rate) which in Spanish means fixed exchange rate.

The exchange rate is a reference that is used in the exchange market to know the number of units of national currency that must be paid to obtain a foreign currency. The FIX exchange rate is a variant of the different existing exchange regimes that are applied in the Mexican markets.

A fixed exchange rate or FIX will be determined by comparing the Mexican peso against the US dollar, in order to maintain a stable exchange rate.

Exchange regimes

In all the countries of the planet, the exchange rate is determined by the exchange regime applied by their central banks or monetary authorities. That is, they determine the way to manage the value of your currency compared to other currencies.

In Mexico, the most widely used exchange rate regimes in its history have been the fixed, flexible exchange rate and exchange bands. According to the Bank of Mexico (Banxico), they can be defined as follows:

  • Fixed: In this system, the Mexican monetary authority establishes a level of the exchange rate, and commits itself, intervening in the market, to guarantee that this exchange rate remains at the most appropriate level for the economy.
  • Flexible or floating: The price of the currency is determined by the supply and demand of the market, without the intervention of the monetary authority.
  • Exchange bands: It is an intermediate scheme between a fixed exchange rate regime and a flexible one. The monetary authority sets a ceiling and a floor, called bands, in which it allows the exchange rate to move freely, but when the exchange rate reaches any of the limits or bands, the authority intervenes to keep it within the levels of band.

Exchange policy in Mexico

Exchange policy in Mexico is the responsibility of the Foreign Exchange Commission, which is made up of officials from the Ministry of Finance and Public Credit (SHCP) and, in greater numbers, by officials from Banco de México.

These institutions determined at the end of 1994 that the exchange rate that would be used in the country was freely determined by the law of supply and demand of the market, said exchange rate is known as flexible or floating. However, since 1991, Banco de México has published a reference exchange rate, known as the FIX exchange rate.

This exchange rate is used by individuals in transactions that involve the exchange of foreign currency abroad, whether in imports or exports, although it is important to note that the parties are free to agree on any other reference for their operations.

FIX exchange rate

The FIX exchange rate is determined by Banco de México, through the realization of an average of exchange market quotes for operations that can be settled on the second banking business day after the calculation.Said quotes are obtained from the exchange exchange platforms and different digital media existing in the exchange market.

Banco de México has the task of announcing the new calculation of the FIX exchange rate as of 12:00 hours on all banking business days. This exchange rate is published in the Official Gazette of the Federation one business day after the date of its calculation.

Example of a FIX exchange rate

In order to correctly illustrate the calculation and use of the FIX exchange rate, we must visualize ourselves on a normal day of transactions in Mexico of foreign currencies with a conversion to Mexican peso. These transactions can be carried out through foreign exchange platforms such as banks, exchange houses and brokerage houses, even digital platforms that allow foreign exchange operations worldwide.

If you are reading this article on a Monday, consider that Banco de México will have to average all exchange operations (flexible exchange rates) that are carried out from 12:00 hours on Monday, together with all operations on Tuesday until Wednesday at noon, in order to add 24 banking hours, the resulting average figure is considered as the new FIX exchange rate.

The new FIX is published on the official website of the Bank of Mexico, starting at 12:00 hours on Wednesday, and will also be published in the Official Gazette of the Federation, with a bank business day of delay after the date of his determination, bone until Thursday, for informational purposes only.

Banco de México calculates the FIX exchange rate every bank business day.

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